“It’s going to be a difficult discussion, of course, but these are the ones worth having, right?” Albuquerque said. “What I have been hearing since I arrived is tremendous support for the savings and investments union. Well, this is about delivering it.”
The European Commission is primed to propose a sweeping package of financial markets reforms on Dec. 3, including the supervision plans, in a bid to revive Brussels’ faltering decade-long campaign to create a U.S.-style capital market.
According to plans first reported by POLITICO, as well as draft documents outlining the proposal, the supervision plan would considerably strengthen the European Securities and Markets Authority (ESMA) to police the likes of Nasdaq Europe and Euronext. The draft also proposes making the future watchdog independent of meddling EU capitals.
Although the main aim of a single watchdog is to boost the EU’s economy by making it easier for finance firms to operate and invest across the EU’s 27 countries, having money flowing so freely around the bloc would also create new risks without strong oversight.
In the event of a meltdown of a firm, such as a clearinghouse, that operates across multiple countries, an EU watchdog could be quicker to jump on the problem than a group of national supervisors acting independently.
The focus on boosting Europe’s capital markets has gathered pace since the pandemic’s bruising impact on national budgets, compounded by the EU’s desperate bid to keep pace with the economic powerhouses of the U.S. and China.